Just reread this note. Absolutely fascinating. Bulls right now are pointing to Commodity prices starting to roll over, while Bears are pointing to gas prices relentlessly going up. This reminds me of your note from before about hog prices in China as a proxy for consistent inflation - was wondering what your views are on this signal? Looks to have established a range after the crash. Perhaps inflation follows suit?
It should be the subject of another note - but I think the deflationary era was in line with a "free market" era - where we kept commodity prices inline by allowing real wages to decline - either through rising unemployment or devaluation or both.
When I look at the US and the UK, its all about government spending to keep real wages strong and offset commodity spikes. This seems to suggest you need to buy any dip in commodities, and sell in rip in bonds. Lets see.
Apologies for the late reply - Jubilee Bank Holiday here in the UK!
Thank you for laying it out more. So because they reduced the capacity of these certain companies, they have in doing so kept the price of the commodity from cratering in a time when you dont need as much of that certain material. Where im getting tripped up is wouldnt that have any impact on the workers at those companies though? Wouldn't you let go of some of your employs if they are redundant? Or do you just start working slower? (LOL, it would be like a Friday afternoon ever day!) If they did let go of some of their working and gave the others a raise because they now dont have to do as much but sales are the same, dont you end up getting a huge divide in income then? Like the fruit of that is labor wage divide?
Thats has always been the problem with government control - lots of inefficiency - but allows redistribution.
I think free markets naturally trend towards inequality - and socialism is the political push back against that trend. Either by revolution or war or socialism - and we are now in that pushback period.
Just reread this note. Absolutely fascinating. Bulls right now are pointing to Commodity prices starting to roll over, while Bears are pointing to gas prices relentlessly going up. This reminds me of your note from before about hog prices in China as a proxy for consistent inflation - was wondering what your views are on this signal? Looks to have established a range after the crash. Perhaps inflation follows suit?
It should be the subject of another note - but I think the deflationary era was in line with a "free market" era - where we kept commodity prices inline by allowing real wages to decline - either through rising unemployment or devaluation or both.
When I look at the US and the UK, its all about government spending to keep real wages strong and offset commodity spikes. This seems to suggest you need to buy any dip in commodities, and sell in rip in bonds. Lets see.
Apologies for the late reply - Jubilee Bank Holiday here in the UK!
Thank you for laying it out more. So because they reduced the capacity of these certain companies, they have in doing so kept the price of the commodity from cratering in a time when you dont need as much of that certain material. Where im getting tripped up is wouldnt that have any impact on the workers at those companies though? Wouldn't you let go of some of your employs if they are redundant? Or do you just start working slower? (LOL, it would be like a Friday afternoon ever day!) If they did let go of some of their working and gave the others a raise because they now dont have to do as much but sales are the same, dont you end up getting a huge divide in income then? Like the fruit of that is labor wage divide?
Thats has always been the problem with government control - lots of inefficiency - but allows redistribution.
I think free markets naturally trend towards inequality - and socialism is the political push back against that trend. Either by revolution or war or socialism - and we are now in that pushback period.
I guess in this case that inefficiency is an okay by-product to them in order to "control" the slow down?
No i am unhappy that you cannot subscribe. But i am relieved to know the low levels of new subscribers is due to a technical fault